The hic et nunc DAO implementation discussion

Copied from the #dao discord channel in the hen-community, Originally posted by FLX#8628.

  1. $hdao is fairly distributed at the moment as most wash traders and weak hands have sold their tokens, and the current holders are loyal supporters who suffered a big loss.

  2. it’s better to use existing $hdao than to have a new token

  3. $hdao should have proper governance voting power versus now (voting weight that can be easily gamed)

  4. $hdao should have a fraction of profit-sharing of the 2.5% cut from the platform.

**@TaoZao proposal **
This is a rough schema that I’ve been circulating:

a proposal for some $hDAO implementations. Hopefully, we are now in a better position to let such items come to fruition:

The following 1/3 fee division for community dividends:

:one: hDAO holders stake to farm 1/3 of the fees.
:two: another 1/3 goes to a community treasury, used for artist grants that hdao holders vote on.
:three: another 1/3 goes to a dev fund.

Then on top of that, $hdao can be implemented as a payment method to buy pieces directly, and artists can manually set a discounted price for hdao purchases to incentivize paying with the native DAO token. This introduces a new distribution method.

of course, the goal is to get others to iterate on this

basically, my thoughts are centered on trying to figure out a way to incentivize a portion of hDAO holders to help maintain price stability (staking to collect some percentage of fees), and another portion is incentivized to continuously re-distribute hDAO to the artist community by SPENDING hdao.

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I like the outline and division of profit, I also think the communities diversity and inclusion list could help put hDAO in the hands of underrepresented regions and communities to give them a decisive share too, with these mechanisms that are already in place.

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And of course the distributions don’t have to be 1/3 across the board; there could be any number of ways of splitting it, according to whatever makes most sense.

Additionally, something else that has come to mind as it concerns making distribution of hdao further possible would be to have a large staking/unstaking fee (something like 4% - ?) which goes into a re-distribution fund which can be used to curate works for selected artists, be somehow redeemable for new artists who make successful sales by some metric, or could simply go into the community treasury just as the other fee portions do. This was inspired by conversations I’ve seen in the past about possibly integrating something like an automated buy-back and burn with hdao curation, but I think a large staking/unstaking fee that goes into a community treasury makes more sense.

The justification for the over-all idea is that we would want to allow the proof of stake model to incentivize keeping a baseline valuation for a native platform asset which can then, through other mechanisms, circulate through the community, such as by allowing it to function as an NFT purchasing currency and letting artists set competitive discounted prices for those who want to purchase with hdao. And with this kind of economic model, it would diminish the weight given to hdao as a governing token. Of course hdao would still be a component of governing rights, but not simply 1 hdao = 1 vote – that doesn’t make a lot of sense. But a curve voting model that uses a complex set of metrics to determine voting rights makes more sense. Hdao would just be one small part of those metrics.

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I really like this idea. And I really dislike the idea of having burn mechanics built in. I think creating systems for the further distribution of the token would be significantly more preferable. Also potentially instead hdao is staked against NFTs rather than as a fee farm (if I understand that properly) and that has withdrawal fees which could go back into the platform via dao somehow?

I feel utilisation of the hdao feed in some way is the best mechanism to fostering an initiation of the use of hdao on the platform and potentially more broadly. I think in that regard rank ordering by hdao curation balance is wildly foolish, and should have options for dispaly instead with the default being newest curations. So you can see them rank ordered asc. and desc. and by date of first/last curation

I also like this, but for some reason hadn’t read that far before starting writing this.

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What do you have in mind as far as staking hdao “against NFTS” (rather than the fee farm…of course, there could be both??)?

I meant instead of the simplistic curating mechanic that exists now, although I think that that could get very complicated very quickly, as in when and by who can the curation balances be withdrawn, if it’s a stake are there rewards, then is there a cut(fee) and what’s that, how could collectors&creators gain from that, there’s a balance to be struck between token owner(s) and creator(s?) there I think.
I think there could be both yes, may not have expressed myself there very well.

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Another thought would be for part of the community treasury to do an auto-buy of hDAO that is given to newly verified accounts when they mint their first NFT

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Okay, so going to synthesize some of the evolution of this thought process so far in a concise bullet pointed format:

  1. portion of fees go to devs

  2. hdao staking allows people to farm some other small percentage of platform fees, helping to stabalize hdao valuation

  3. another portion of platform fees go to a community treasury designated for grants, or auto buy-backs of hdao to disburse to new artists when they mint their first NFT

  4. hdao staking/unstaking have 4% fees on both sides, and these fees go to the community treasury as well

  5. artists can choose to accept hdao for pieces as a way to gain equity in the platform

  6. hdao is given only a small weight in terms of its governing power, and its primary use will be to help create a semi-circular economy within HeN, allowing community members to have equity in the platform (edited)

Justification:

The justification for the over-all idea is that we would want to allow the proof of stake model to incentivize keeping a baseline valuation for a native platform asset which can then, through other mechanisms, circulate through the community, such as by allowing it to function as an NFT purchasing currency and letting artists set competitive discounted prices for those who want to purchase with hdao. And with this kind of economic model, it would diminish the weight given to hdao as a governing token. Of course hdao would still be a component of governing rights, but not simply 1 hdao = 1 vote – that doesn’t make a lot of sense. But a curve voting model or quadratic voting that uses a complex set of metrics to determine voting rights makes more sense. Hdao would just be one small part of those metrics.

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Sounds reasonable. hDAO would be put into real use in such a scheme.

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Def a fan. An idea for some metrics:

-Has minted x amount separate tokens on HEN
-Has collected x amount of separate tokens on HEN
-is holding at least 1 hDAO

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I really like the ideas here to keep hDAO as the governance token for H=N and giving it more utility.

While I support staking hDAO to receive a share of platform fees, I‘d like to also propose to make the governance token as such that only staked hDAO have voting rights, while non-staked hDAO can be used more as a currency and/or for other utility.

An unbonding time could also be considered, like 7-14 days, during which the tokens cannot be used for voting nor do they receive platform fees. Coupled with an unbonding fee as proposed by others above, such a system would give users an incentive to stake their hDAO in order to participate in governance of H=N, while also providing some dis-incentives for people who are only interested in short-term gains, but do not care about the future of H=N.

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Pasted from Discord #dao channel

There is some debate over the new token.

  1. Dev fund: is a fraction of 2.5% enough to sustain a team for tech and marketing IF there is no new token. Or shall we CREATE a new token and give say 50% of that 2.5% cut to HDAO holders.

  2. who is going to decide where the leftover token goes if there’s a new token?

My point of view

I am FOR a new token due to following reasons

  1. I do think we should have some token reserved for core / community team and vest for 3-4 years just like other crypto projects. The token grows in value if they do a good job. There’s nothing more encouraging than seeing users + token growth.

We can also allocate some tokens for retroactive reward to collectors and artists for their contribution for HEN.

That being said, I do think HDAO holders should entitle at least 50% of the 2.5% cut IF there is a new token and partially reserved for future team and other stakeholder.

  1. who decide? I think we should vote purely with HDAO if there is a new token. Tez profile and Hicathon badge should not weight more than HDAO, as now the team gets their HDAO to represent their voice.

To sum up, I feel okay to have a new token for say fixed 1 million total amount. (1) Old HDAO can swap 1:1 to new token. And 350k goes to team and community. (2) In future we vote with HDAO only, or at least majority of the voting power. (3) HDAO holders share 50% of the 2.5% cut.

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Two items from Discord discussion-

For HDAO staking to be eligible for revenue sharing:

The way we can do it - have a staking function to encourage HDAO holders to stake and earn platform fee (whatever % of that 2.5% cut)

For example: if the revenue for HEN is 1,000 Tez, and say 500,000 HDAO is staked in smart contract, then 1,000 Tez is split between the 500,000 HDAO by proportion of ownership. I staked 100,000 HDAO, then I can get 200 TEZ for return.

This way we can ONLY incentivize the people who are willing to hold on to HDAO. It is super common on DeFi, ie Sushiswap has xSUSHI which is the staked SUSHI token. It is not having 2 tokens, just 1 HDAO.

For dual token by @timonty

Personally I quite like Uniswap’s model since it is more community centric. Depending on whether we want representatives (e.g. like bakers on Tezos), it could be a hybrid model between Uniswap and Tezos. If not, I would go for something similar to Uniswap.

From what I see above as well, there’s some discussion about the monetary and non-monetary aspects of hDAO as a governance token?

I think one idea would be to consider a tradeable token (hDAO) and non-tradeable token (e.g. sDAO). sDAO would essentially capture the voting power idea mentioned by <@!190590066903613440> where you have votes depending on how many pieces you’ve minted/collected , while hDAO is as it is

Total voting power could be simply hDAO + sDAO, or be a function taking into consideration a weightage of hDAO/sDAO, (e.g. 40%/.60%) which would be decided through governance voting

Compiled Discord discussion about the high level demand for a DAO

Question by #tezexplorer#5880

I think theres a bit of a risk of getting lost and arguing some of the contentious details before agreeing what the purpose of the dao is at a higher level. What about agreeing what the purpose/principles of the dao is before talking about lock-ups, whether to use hdao or create a new dao, etc?

@FLX opinion

Super valid point. imo we are discussing about the following items

  1. How does a DAO work to include all stakeholders ie devs, volunteers, promoters, artists, collectors to work together? How to make sure their voice be heard, to unite everyone at hicetnunc?

  2. A gov token that grants power to its holders for voting on parameters, features, and other aspects of hicetnunc marketplace

  3. A gov token that captures the growth and represents the value of hicetnunc marketplace.

  4. A utility token that is possibly serving as a way to curate, discover, or purchase artworks on hicetnunc marketplace.

  5. A utility token to incentivize devs, promoters, artists, collectors and other stakeholders to grow hicetnunc marketplace.


reposting from discord

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Reposting again from discord @TaoZao :

  1. Trying to figure out the best way to implement hdao, such that it can both function as the basis for a semi-circular economy allowing the community to achieve equity in HeN, while also incentivizing re-distribution through some currency function & also community voted grant distribution (there was also an idea to have some small portion of fees harvested go to an auto-buy back).

  2. There is an additional discussion woven in about whether hdao or some new token would be used. The issue is on distribution. One line of thought is that a new token would allow us to start from scratch with a new distribution model, but there is another line of thought where people are concerned with respecting the network effect that hdao already has in open circulation. I think there is general agreement, however, that whatever a new token is issued with some kind of built in taxing model for an airdrop, hdao holders should be a serious and respected part of the decision.

Lastly, there is some general agreement on diminishing the voting power of hdao itself. It would rather be one component in a quadratic voting model.

It’s primary function would be economic.

From @tezexplorer :
I think this is a good summary. I think there is some agreement that no one person should be able to control the vote either by being allocated too many tokens or by being able to buy all the tokens i.e. if you had unlimited money your vote would still be capped
other things: we need to be able to reward people who have contributed in the past but also save tokens/rewards in a DAO treasury to reward people in the future

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adding this to the discussion: Platform fees should go to the DAO and the DAO should fund infrastructure, developers and positive community contribution. The DAO will vote on how to split across these areas and this can be changed by vote on an on-going basis

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Resosting from Discord. @FLX:

6,011 holder address is a big amount for a tezos FA2 token. I do think we should consider minting a new token “$HEN” (just an example), with 1 million total amount capped.

For reasons:

  1. We need to incentivize the future team working on the platform, and give them token that vests for 3 years.

  2. We need to incentivize artists and collectors who used the platform.

  3. When team, artists, and collectors get $HEN token, they can vote with it and get their voice heard. I guess not many of them have $HDAO. Out of 1 million, 650k $HEN will be 1:1 swap from $HDAO, and the remaining 350k $HEN will go to 1) Say 200k goes to devs, marketing team & representatives who develop features, fix bugs, and maintain the platform. The 200k $HEN will be vested for 3 years, and controlled by the DAO. 2) Say 100k goes to retroactive airdrop to HEN users - artists, collectors who has been active since the last $HDAO airdrop until now. 3) Say 50k $HEN for DAO reserve for marketing, campaigns, events etc.

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  1. @mitchmurray

Distribution of 2.5% fee’s - voting through hen.vote

Sustainability
Development team
Broken Glass event
Emerging artist collective
hDAO dividend

Sustainability - fund set aside to insure that the site will exist regardless of a down cycle in the crypto market. This allotment includes payment for the servers and related technologies on a month to month basis. Plus setting aside funds to carry these operations for 6-12 month in reserves.

Development team - payment to the development team for work being done to maintain and upgrade the site. Many variables need to be determined so a few centralized decisions should be made at this pointing towards a DAO structure. i.e. fee structure, contract awarding. Contract awarding can be done through hen.vote.

Broken Glass - this allows the multi-sig access to the general treasury in case of an emergency.

Emerging artist collective - could also be called diversity fund. A group of voted on representatives have access to funds to encourage emerging artists from under-represented areas of the world or groups to receive support, i.e. housing, supplies.

hDAO - dividends paid to all hDAO holders on a monthly basis. \discussion points from WG5.4 (edited)

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Dear all,
I propose this mechanism for Dao on hen and summary the usecase of $hdao.
We can use all resources that already existed for hen including hen.vote, $hdao.
This help avoid complex mechanism like create new token. I am not against it, just find simpler solution.
Any verified account could vote, + small amount $hdao to avoid spam.
$hdao is used as payment can produce fund for treasury from the fee.

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Reposting from @tezexplorer on discord

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